How to set up an LLC for your rental property in South Carolina

If you’re a landlord or real estate investor in South Carolina, you’ve probably heard that forming an LLC (limited liability company) can be a smart move for your rental properties. But how exactly do you set up an LLC for a rental property here? What does it protect you from, how much does it cost, and what ongoing responsibilities come with it? 

In this guide, we’ll walk through everything South Carolina landlords need to know about LLCs—from the basics to the nitty-gritty of filing requirements, costs, timelines, and more. Along the way, we’ll also touch on related topics like S corps, insurance comparisons, and when an LLC actually makes sense for your rental business.

What is an LLC and what does it protect you from as a South Carolina landlord?

An LLC, or limited liability company, is a business structure that combines the liability protection of a corporation with the flexibility and simplicity of a partnership or sole proprietorship. 

For landlords, the main appeal of an LLC is that it may help protect your personal assets from lawsuits or debts related to your rental property. For example, if a tenant sues you after an injury on the property, your personal bank accounts and home might be shielded, depending on how your LLC is maintained and whether business and personal finances are kept separate. It’s important to consult a qualified attorney to understand the limitations and requirements for liability protection.

That said, an LLC doesn’t protect you from everything. It won’t shield you from liability if you personally guarantee a loan or commit fraud. It also won’t protect against income taxes on rental profits, which still flow through to your personal tax return unless you elect a different tax status. 

If you want a deeper dive, check out our guide on whether or not landlords should use an LLC for their rental properties.

Step-by-step: how to set up an LLC for a rental property in South Carolina

Setting up an LLC in South Carolina is a fairly straightforward process. Here’s how to do it:

1. Choose a name for your LLC

South Carolina requires your LLC’s name to be unique and include “Limited Liability Company,” “LLC,” or “L.L.C.” You can check name availability on the South Carolina Secretary of State website.

2. Designate a registered agent

South Carolina law requires every LLC to have a registered agent with a physical address in the state. This person or business receives official legal documents on behalf of your LLC.

3. File articles of organization

The official paperwork to create your LLC is called the articles of organization. These are filed with the South Carolina Secretary of State. You can file online or by mail.

4. Create an operating agreement (optional but recommended)

South Carolina doesn’t require an operating agreement, but having one helps clarify how your LLC will be managed and how profits/losses are divided. It’s especially important if you have multiple members.

5. Get an EIN for your LLC

Most banks and the IRS require your LLC to have an Employer Identification Number (EIN) for tax purposes. You can apply for this online through the IRS.

6. Open a business bank account

Keeping your LLC’s finances separate from your personal money is generally important for maintaining liability protection. Consider consulting a professional for best practices.

7. Understand ongoing compliance

South Carolina LLCs generally must file an annual report and pay a fee every year to stay in good standing. Check official sources or consult a professional for details.

How much does it cost to set up an LLC in South Carolina?

The main cost is the LLC filing fee to file your articles of organization with the South Carolina Secretary of State. As of 2025, the fee is $110 whether you file online or by mail.

Beyond that, there is a $25 annual report fee due each year by the anniversary date of your LLC’s formation – but only if it's taxed as an S corp. More on that later.

Other potential costs include:

• Hiring a registered agent service if you don’t want to act as your own agent (usually $100–$300/year)
• Fees for obtaining business licenses or permits depending on your location
• Optional help from a lawyer or formation service

If you want a detailed breakdown of ongoing costs like insurance, check landlord insurance in South Carolina.

How long does it take to set up an LLC in South Carolina?

If you file online with the South Carolina Secretary of State, LLC formation can be processed within 1–3 business days. Paper filings by mail take longer, usually 7–10 business days depending on mail and processing times.

You can check current processing times and file online at the South Carolina Business One Stop portal.

What are articles of organization and how to file articles of organization in South Carolina

The articles of organization is the official document that creates your LLC. It includes:

• The LLC’s name
• The registered agent’s name and address
• The LLC’s principal office address
• Whether the LLC will be managed by members or managers
• The organizer’s signature

To file your articles of organization in South Carolina, you can:

• Submit online via the Secretary of State’s website
• Or mail a completed form with the $110 filing fee to:

  South Carolina Secretary of State  

  1205 Pendleton St., Suite 525  

  Columbia, SC 29201

Once processed, you’ll receive a certificate confirming your LLC’s formation.

Do I need a lawyer to start an LLC for my rental property?

While you don’t necessarily need a lawyer to set up an LLC in South Carolina, and many landlords successfully DIY the process, consulting a lawyer can be beneficial depending on your situation. A lawyer can help if you want:

• Customized operating agreements
• Advice on complex ownership structures
• Help understanding tax implications or liability protection nuances

For simple single-property LLCs, you may find using a formation service or following state instructions sufficient.

How to get an EIN for an LLC that owns rental property in South Carolina

An EIN (Employer Identification Number) is like a social security number for your LLC. It’s required to open bank accounts, file taxes, and hire employees (if any).

Getting an EIN is free and simple:

• Go to the IRS EIN application page
• Complete the online form for your LLC
• Get your EIN immediately after submission

If you have questions or want assistance, you may consider consulting a tax professional.

Do LLCs need annual reports and other ongoing compliance in South Carolina?

Yes. South Carolina requires LLCs to file an annual report each year to maintain active status. Here’s what you need to know:

• The annual report fee is $25
• Reports are due by the anniversary date of your LLC’s formation
• You can file online at the Secretary of State’s website

Generally, failing to file your annual report or pay the fee can lead to administrative dissolution, meaning your LLC may lose its good standing. Check official sources or consult a professional for details.

There may be additional local business licenses or permits required depending on your rental property’s city or county.

S corp vs LLC for landlords in South Carolina: a quick comparison

Many landlords wonder about the difference between an LLC and an S corporation, especially for tax purposes. Here’s a very high-level view (remember, this isn’t tax advice!):

• An LLC is a flexible business entity that can be taxed as a sole proprietor, partnership, or corporation.
• An S corp is a tax election that certain LLCs or corporations can choose to potentially reduce self-employment taxes.
• S corps require more formalities like payroll, shareholder meetings, and stricter ownership rules.
• For many South Carolina landlords, a simple single-member LLC is a common choice because it is generally easier to manage and may offer liability protection.
• Talk to a tax professional to see if an S corp election makes sense for your rental business.

LLC vs umbrella insurance for rental property risk management

Liability protection isn’t just about forming an LLC. Insurance plays a critical role too. Many landlords wonder: should I rely on an LLC or buy umbrella insurance?

• An LLC can help protect your personal assets from lawsuits related to your rental property, but it doesn’t cover damages or claims directly.
• Umbrella insurance provides an extra layer of liability coverage beyond your landlord insurance policy, which can cover large claims.
• Many landlords consider using both: an LLC for legal protection plus landlord insurance and umbrella policies for financial risk management. Evaluate your own situation and consult a professional to determine what’s best.
• For more details on these differences, check out Steadily’s post on LLC vs umbrella insurance.

When does it make sense for landlords in South Carolina to set up an LLC?

An LLC may make sense for South Carolina landlords who want to:

• Separate personal assets from rental property liability
• Simplify managing multiple rental properties under one entity
• Potentially improve credibility with lenders or tenants
• Have flexibility in ownership and management

However, if you own just one property and don’t have significant liability concerns, an LLC might add complexity and costs without much benefit.

Ultimately, it’s a personal decision based on your risk tolerance, property portfolio, and financial goals. Consider consulting a qualified attorney or tax advisor to tailor the choice to your situation.

Next steps: protect your rental property and assets in South Carolina

Setting up an LLC is just one piece of the puzzle for landlords. Make sure you also:

• Review your insurance policies, including landlord and umbrella coverage
• Keep your LLC compliant with annual reports and state rules
• Maintain separate finances and good record-keeping

For more tailored insurance options in the Palmetto State, explore landlord insurance in South Carolina.

Remember, while this guide covers the basics of how to set up an LLC for a rental property in South Carolina, always consult with a qualified attorney or tax professional for advice specific to your circumstances. Setting up your LLC correctly and maintaining it properly can help reduce risks and protect your investments over time.